We review regular savings returns to September 30, 2014 for Growth KiwiSaver funds, identifying who has the best long-term returns

Growth fund returns may not be as stellar as the aggressive KiwiSaver schemes but they are still pretty good nonetheless, at present.

The top quartile Growth funds are achieving returns comparable with a mid-pack Aggressive fund, so in theory, by investing in top echelon Growth funds you are getting the same return as an average Aggressvie fund but for less risk, which is always a positive thing.

Using our unique 'regular savings' model to calculate fund returns, we can see many of the funds have achieved returns over 9% per annum for the six and a half year period since April 2008.

Over the shorter three year period a majority of the funds have exceeded double figures which in turn is bolstering the longer term numbers.

There are clear leaders and stragglers in this sector.

The leaders include regulars such as Mercer, AON, AMP, and ANZ. Included in the top echelon of the sector are accounting firm Staples Rodway who keep punching above their weight. Across the entire sector the average return is 8.5% per annum after tax and fees. All of these funds have added considerable value to investor accounts since 2008.

Those funds falling well off the pace compared with their peers include three funds from Craigs Investment Partners, one from Mercer (managed by AMP) and a SmartKiwi fund which is owned and operated by the NZ Stock Exchange.

Fidelity, Grosvenor (who now owns Fidelity and was recently appointed as a default scheme provider) and AMP's in-house Balanced fund are not too far above the aforementioned five cellar dwellers.

For investors in the schemes at the rear of the field the returns you have received are poor returns when taking into consideration the additional risk you are accepting compared to a more conservative fund (or even a bank term deposit). Past returns are no guarantee of future results but a strong consistent track record is something investors should value.

It is worth noting however that the Fidelity Growth fund which sits near the bottom of our table below does appear to be a fast improver. Returns in the past three years are up with the top-half funds and with that recent improvement this Fund may start rising up our list fairly quickly.

On the other hand, the Mercer SuperTrust Active Balanced fund, which is also in the bottom half, is the only fund to have worse three-year performance than its lifetime results.

Also keep in mind when reviewing the sector performance that in some cases the lack of exposure to shares will be a major contributor to a fund languishing below the competitors. If we were to see a reversal in stock market performance these bottom dwellers could start to rise up the rankings.

Here are the full comparison as at September 30, 2014 for Growth Funds.

The following growth funds have not been going long enough to be included in the above table.

For explanations about how we calculate our 'regular savings returns' and how we classify funds, see here and here.

There are wide variances in returns since April 2008, and even in the past three years, and these should cause investors to review their KiwiSaver accounts especially if their funds are in the bottom third of the table.

The right fund type for you will depend on your tolerance for risk and importantly on you life stage. You should move only with appropriate advice and for a substantial reason.

Our next review will look at returns to September in the Balanced Funds category as part of our updated monitoring of regular savings KiwiSaver returns. Our September review of Aggressive Funds is here.